Random House to digitize thousands of books

[Ak Mike]

Hi Taylor514ce - sorry if I was unclear. What I meant by "opportunity cost" is that a publisher has X dollars to invest in producing books. Whenever she spends that money, for example, on producing e-books, she has lost the opportunity to spend that money on trade paperbacks. Opportunity cost is just the fact that if you buy one thing, you have lost the opportunity to use the same money to buy something else.

So the money that a publisher might use to produce electronic books could be used instead to produce still more trade paperbacks. If trade paperbacks sell at a very high profit, she would be smarter to use that money to make more trade paperbacks and ignore electronic books - unless the electronic books could also be sold at a high profit.

Therefore, the high prices and (presumably) high profit margins of trade paperbacks lead to high prices for electronic books - since the e-books would not be worth producing unless they had comparable high profit margins.

[alehel]

I'm just hoping they'll be better quality than what some of the other publishers have been offering. Most of all I hope they provide proper covers for their ebooks. Surely that isn't that hard.

[Taylor514ce]

Originally Posted by Ak Mike

Hi Taylor514ce - sorry if I was unclear. What I meant by "opportunity cost" is that a publisher has X dollars to invest in producing books. Whenever she spends that money, for example, on producing e-books, she has lost the opportunity to spend that money on trade paperbacks. Opportunity cost is just the fact that if you buy one thing, you have lost the opportunity to use the same money to buy something else.

So the money that a publisher might use to produce electronic books could be used instead to produce still more trade paperbacks. If trade paperbacks sell at a very high profit, she would be smarter to use that money to make more trade paperbacks and ignore electronic books - unless the electronic books could also be sold at a high profit.

Therefore, the high prices and (presumably) high profit margins of trade paperbacks lead to high prices for electronic books - since the e-books would not be worth producing unless they had comparable high profit margins.

Thanks for the explanation. That makes sense; money spent on X means less money to spend on Y, therefor, Y is more expensive. But that's still a tenuous link to the conclusion that "trade paperbacks make eBooks more expensive". As I now understand "opportunity costs", anything a publisher pursues makes every other pursuit "more expensive".

[Ak Mike]

Taylor514ce - you're quite right that the "opportunity cost" explanation is overextended if we use it as "the" reason why e-books are as expensive as they are. Still, I think that if we want to know whether higher trade paperback prices have no effect, a downward effect, or an upward effect on e-book prices, we would be correct to say the effect (possibly small) is upward.

[Taylor514ce]

Since publishers, for the most part, price e-books to match the current print edition, and since publishers have adopted a model of coming out with the most expensive and profitable edition first (hardcover), then trade, then mass-market, one could argue that trade back lowers the cost of e-books.

If publishers stopped producing trades, and are motivated by profit, what would likely happen is that they'd extend the shelf-life of hard cover. According to their current pricing model, then, e-books would be higher priced over a longer period of time.

Therefore, trade paperbacks, in addition to being generally better quality (paper and typography) than mass-market, easier to read in most cases, with more attractive covers and a size many find comfortable to hold, LOWER THE COST OF E-BOOKS!